Wall Street bundles Bitcoin with gold to hedge currency debasement

Wall Street is increasingly pairing Bitcoin with traditional assets like gold to hedge against U.S. currency debasement, a strategy gaining traction after Treasury Secretary Scott Bessent announced on Aug. 19 that the government would expand its purchases of long-dated bonds effective Sept. 9. This move, designed to keep bond yields low, has fueled investor fears of rising inflation and pushed demand toward scarce stores of value.

Bitcoin (CRYPTO: BTC) is up 22% since Bessent's announcement, while gold, as measured by the SPDR Gold Shares ETF (NYSEMKT: GLD), is down 2%. The divergence suggests that despite gold's historical role as an inflation hedge, it is not currently capturing the same upside as Bitcoin in this specific environment. Grayscale reported on Aug. 27 that Bitcoin's 90-day price correlation with gold had risen above 50%, up from near zero in January. By Sept. 9, that correlation had climbed to approximately 74%, supporting the view that investors are beginning to treat Bitcoin as a scarce store of value alongside precious metals.

The operational constraint driving this shift is supply. Bitcoin’s maximum supply is capped at 21 million coins, a limit that cannot be altered by government action. In a scenario where U.S. monetary policy expands, this fixed supply makes Bitcoin a convenient vehicle for large capital flows, particularly given its lack of international boundaries. However, institutional adoption remains cautious because Bitcoin functions as both a new technology and a new asset class, raising the burden of proof for its inclusion in conservative portfolios.

To mitigate this risk, fund managers are bundling established inflation hedges with digital assets. Bitwise Asset Management launched an exchange-traded fund in late January 2026 that explicitly targets currency debasement. The fund holds at least 25% in spot gold, alongside Bitcoin and mining stocks. Similarly, MicroBit listed Hong Kong’s first ETF holding both Bitcoin and gold on Aug. 26. These products reflect a broader institutional preference for combining tried-and-tested physical assets with newer digital contenders to manage exposure to rising inflation expectations.